Lost or delayed? Apple’s supply chain woes have cast doubt on his iPhone sales over the holidays as investors await earnings for the December quarter after closing bells.
Apple (AAPL) – Get Free Report After Thursday’s closing bell, the tech giant’s December quarter earnings were buoyant as investors focused on the impact of last year’s supply chain disruptions in China and near-term demand for iPhones and personal computers. Stocks rose solidly before expected.
Apple expects first-quarter net income of $1.94 per share, down 7.6% from the same period last year, on revenue of $121.2 billion. The iPhone’s entry into the U.S. market and his ongoing Covid crisis in China could lower that number.
The overall revenue tally marks the first annual decline for Apple in four years, with iPhone sales likely down 5%, reaching a record $71.63 billion in the same quarter last year. .
Apple said on Nov. 6 that Foxconn’s 200,000-person factory in Zhengzhou, known as “iPhone City,” has “currently been significantly reduced” due to coronavirus restrictions introduced last month by officials in Beijing. We are running at full capacity,” he warned, adding that the company may cut iPhone shipments. A high-end iPhone heading into the holiday season.
Projections of the group’s near-term profits and earnings could prove important for investors to determine whether demand will sustain as they recapture delayed sales in December.
“The impact of the Chinese government’s COVID-zero policy on Apple has meant that iPhone sales have shifted into the March quarter, rather than being lost,” said Tom Forte, an analyst at DA Davidson. I’m here. The target price for the stock is $167.
Forte sees a revenue “shift” of around $5.4 billion, but that figure requires sustained smartphone demand and consistent consumer spending, both dynamics seemingly weakening.
Last month, Taiwan Semiconductor Manufacturing Co., the world’s largest contract chip maker and Apple’s main assembler, cut its capital spending plans for next year amid weak global demand.
Samsung, Apple’s main smartphone rival, told investors earlier this week that the global mobile phone market is likely to shrink this year.
Meanwhile, declining demand for personal computers is likely to slow sales of other Apple hardware.
both intel (INTC) – Get Free Report and advanced microdevices (AMD) – Get Free Reportthe largest US chip maker focused on the PC sector has warned that demand will wane over the next few months amid an overall oversupply and receding global consumer spending.
In the US, consumer spending has similarly slowed significantly, with December retail sales falling 1.1% to total $677.1 billion, following a 1% drop in November.
According to Wedbush analyst Dan Ives, this likely means that investors will “focus on[CEO Tim]Cook’s comments for the 3/6 quarter.”
“In our opinion, Cupertino is likely to be more cautious about its March quarter guidance, as Street has already scaled back its growth expectations and a lot of bad news has been baked into the stock. is a smart move,” he added.
Apple could also mention ongoing job cuts affecting the tech sector, especially given the impact cost controls have had on Meta Platforms’ profit margins. (meta) – Get Free Report.
Meta last week announced plans to cut more than 11,000 jobs worldwide. This is the largest reduction in the company’s history. This is to counter rising losses in the metaverse project and lower ad spending that continues to impact sales in its flagship Facebook division.
In an interview with CBS Mornings in November, Cook said Apple would continue hiring, but only with targeted additions to its estimated global workforce of about 165,000.
“As a result of this time (to economic uncertainty), we are very cautious about hiring…I mean, we are still hiring, but not everywhere in the company is hiring. said Cook. According to a clip of the interview shared by CBS Morning.
“We strongly believe in long-term investments,” added Cook.
Apple shares rose 1.84% in pre-market trading, pointing to an opening price of $148.11 each, expanding the one-month gain to about 19%.